Mississippi State University’s Forest and Wildlife Research Center and Social Science Research Center recently surveyed landowners in Mississippi about their acceptable rates of return for investments in timber, with Dr. Steve Bullard, professor of forest economics, serving as project investigator. According to Bullard, the researchers contacted thousands of Mississippi landowners and interviewed 829 of them to guarantee an accurate statistical representation.
“We asked landowners about some of their plans for regeneration and some of their investment expectations,” Bullard said. “About 70 percent of the timberland is owned by private individuals, so everything about it is important to them and this industry.”
Bullard and the other researchers surveyed landowners that met a specified set of qualities. To be included in the survey, the landowners must own at least 20 acres of land and harvest their timber some time within the last five years. According to Bullard, harvesting within the past five years is important for the researchers to survey the landowners’ plans for regeneration.
Regeneration is extremely important to the landowners. According to Bullard, if landowners do nothing after the harvest, it might be 50 or 60 years before another harvest is possible. When no steps are taken to actively regenerate, the trees grown will be of a lesser quality. These lesser quality trees are not suitable for wildlife or for timber.
“Through active regeneration they have a much better stand within 15 or 20 years. By scientific practices, you can get a much better stand and achieve your objective. Some people’s objective is to make money; some to provide a good habitat. For some it is a mixture,” Bullard said.
Landowners expect to gain a higher rate of return for long-term investments. Short-term investments produce a lower rate of return.
“If you want people to invest money to plant trees, then you have to do something to increase the returns,” Bullard said. “Mississippi has been very proactive. Our state government has encouraged landowners to grow pine tress and other kinds of trees.”
According to Bullard, pine trees grow fastest and are usually grown for commercial timber. It is important to most of the landowners to be good stewards of the land. This means they will plant many different kinds of trees, so that the soil is not exhausted. In many situations, it is necessary for the landowners to plant the specific type of tree that will grow best on their land. Doing this also increases the wildlife habitats in the area.
According to Bullard, Mississippi was the first to have a state-sponsored cost-share program. This means that the state shares in the cost of the land with the landowner.
“Say it (what) costs $150 an acre, the state will pay a certain percentage of that. Mississippi was the first to do this, and almost all of the other states have fallen in line,” Bullard said.
Mississippi is also the first state to offer a state income tax credit on the land investments.
“This means that when we file our income tax return, if we’ve planted trees, the state will give us a lot of the money back. We can receive credit for up to 50 percent of the cost. This represents that the state government has tried very hard to encourage timber production,” Bullard said. “Today we have literally millions of acres of timber that would not have existed without these programs.
“Mississippi is one of the only states that has been proactive on this issue. This is something we can be proud of in Mississippi,” Bullard said.
For more information about this research project and timber investments contact Bullard at 325-2781.